1. If European development assistance were properly
targeted, it could make a significant impact on the reduction
of poverty, the promotion of sustainable development, and the
achievement of the Millennium Development Goals. The European
Community spends around $5 billion per year in Official Development
Assistance, contributing nearly ten percent of the aid provided
to developing countries by the members of the Organisation for
Economic Cooperation and Development's Development Assistance
Committee. In 2000, the EC was the fourth largest donor of ODA,
behind Japan, the USA and Germany, with the UK in fifth place
(see Table 1).[3] European
development assistance provided through the EC budget is funded
in large part by Germany (24 percent), the UK (20 percent), France
(16 percent), and Italy (12 percent).[4]
In 2000/2001 the Department for International Development (DFID)
contributed £709 million towards the EC's aid effort,[5]
an amount which absorbed 25 percent of DFID's budget.[6]

Table 1: Major Donors' Net Disbursements of ODA
in 2000

Donor

ODA Volume ($ billion)

Japan

13.5

United States

10.0

Germany

5.0

European Community

4.9

UK

4.5

France

4.1

Data source: OECD International Development Statistics Online

2. With such a large proportion of DFID's budget being channelled
through the EC, we are concernedas other member states
which make large contributions should beto ensure that
European development assistance is targeted appropriately and
spent effectively on poverty reduction. But, we have no hesitation
in supporting the principle of multilateral aid. We take the view
that European development assistance can and must add value to
what could be achieved by channelling the funds through the bilateral
programmes of individual member states. A coordinated multilateral
programme can deliver contributions from member states who might
otherwise contribute little; prevent unnecessary duplication,
inefficiency and the placing of unreasonable administrative burdens
on developing countries; sustain a European-wide policy on international
development; and push development into other areas of European
policy. We agree with Clare Short's assessment that, "If
we could drive forward a really coherent committed development
agenda throughout the Commission it could be a fantastically powerful
force for good".[7]

3. Parliamentary scrutinyby national Parliaments individually,
and, as we discussed with members of the European Parliament's
Committee on Development and Cooperation, in concerthas
a vital role to play in driving forward the reform process. The
International Development Committee has inquired into the EC's
development policies and practices on three previous occasions,
providing a comprehensive account of past weaknesses and inefficiencies,
andwith increasing levels of concernurging the EC
to reform its development assistance.[8]
Following some earlier half-measures, the Commission eventually
began a concerted process of reforms in 2000, to improveas
Mr Bonacci of EuropeAid put itthe quality, speed of implementation,
and impact, of programmes.[9]
The reforms are at an early stage; the key issue now is their
implementation. We share Chris Patten's view that a lack of significant
improvement by the end of 2004 would constitute failure,[10]
and look forward to initial results this year. Ultimately, we
are interested in on-the-ground impacts and improvements in the
effectiveness of European development assistance and will continue
to monitor this during the course of our overseas visits; this
inquiry provides the Committee with an initial opportunity to
assess whether the reforms are on track to produce these results.

4. In chapter two we set the context for, and provide an overview
of, the reform process. In chapter three we examine the poverty
focus of European development assistance, both in terms of policy
and in terms of the allocation of resources. In chapter four our
attention turns to the institutions and management of development
assistance, looking in particular at the EuropeAid Cooperation
Office. Finally, in chapter five, we draw together our conclusions
about the effectiveness of the reforms of European development
assistance.